GSE readies launch of Commercial Paper Market at end-Q3 for Blue-Chip Companies
In a strategic move aimed at fostering diversification within Ghana’s securities market, the Ghana Stock Exchange has recently announced its impending foray into the realm of Commercial Paper Market, with plans to initiate operations by the end of the third quarter in 2023.
With a primary objective to furnish short-term funding support to esteemed blue-chip companies boasting commendable creditworthiness, the envisaged Commercial Paper Market seeks to augment the depth and liquidity of Ghana’s securities landscape, ultimately propelling the nation’s economic development.
Blue Chip companies are those with a national reputation for quality, reliability, and the ability to operate profitably in both good and bad economic environments. MTN Ghana for instance can easily pass for a blue-chip company.
Addressing a gathering of key stakeholders hailing from the trading and securities domain, Abena Amoah, the Managing Director of Ghana Stock Exchange (GSE), underscored the paramount significance of the Commercial Paper Market, not only for its potential to invigorate market dynamics but also to enhance the much-desired diversification of investment options.
The advent of this new market offers a propitious avenue for private pension funds, keen to explore investment diversification, and companies seeking alternative sources of short-term finance beyond conventional banking channels. By bridging the gap between investors and companies in need of such financing, the Commercial Paper Market endeavors to usher in a new era of financial flexibility and risk reduction.
To facilitate a seamless rollout of the program, key industry figures emphasized the importance of developing a fitting regulatory framework. Seth Asante, the Managing Partner at Bentsi-Enchil, Letsa, and Ankomah, lauded the concept of a self-regulatory system, acknowledging its potential to streamline processes and expedite financial access for market participants. Speed to market was highlighted as a critical component, particularly due to the short-term nature of the envisaged market.
Addressing concerns surrounding confidence levels in light of previous debt restructuring exercises, Kobby Bentsi-Enchill, the Head of Investment Banking at Stanbic Bank Ghana, emphasized the paramount role the Commercial Paper Market would play in reinvigorating market confidence. As asset management funds seek alternative avenues for investments, this new platform stands poised to fulfill those needs while signaling a robust and forward-looking financial landscape.
A commercial paper, being an unsecured, short-term debt instrument commonly issued by corporations, serves as an ideal solution for financing immediate obligations like payroll, accounts payable, and inventories.
In an effort to offer investors a well-rounded suite of both short and long-term investment options, the establishment of the Commercial Paper Market is a concerted endeavor by the Ghana Stock Exchange, in tandem with the Securities and Exchanges Commission and other pertinent stakeholders.
